Whether it’s Elon Musk’s “firehose” access to Twitter data or controversy over the legitimacy of ESG investment data, consumers and businesses alike are spending more time considering the ethical tentacles of data.
Fears about how data is collected, how it’s used and how it’s shared are more relevant now than perhaps at any other time in history. In fact, 86 percent of survey respondents recently said they feel a growing concern about data privacy, while 40 percent said they don’t trust companies to use their data ethically.
If there’s one asset credit unions are eager to maintain, it’s trust. Becoming intentional about member data ethics, therefore, will be a critical piece of every credit union’s strategic plan going forward.
Staying Mindful of Data Bias
For credit unions, a foundational challenge to safeguarding data ethics is the many slices that make up the average cooperative’s data pie. The member data that today’s most exciting fintech feeds on is baked in many different kitchens overseen by many different cooks.
“The complexity is likely to get worse before it gets better. That’s because artificial intelligence and machine learning tech have insatiable appetites for data,” said Co-op VP of Data Management and Analytics Catherine Maloney, who is also a certified data ethics professional. “The more they ingest, the hungrier they become.”
Catherine Maloney, VP of Data Management and Analytics,
To be sure, positive outcomes for members abound. AI-based fintech promises incredible strides in areas like financial inclusion and credit access, personalized financial guidance, and safer payments. Yet, for every promise of good, there is the threat of not-so-good.
Some negative impacts of biased AI include perpetuating the marginalization of certain communities. One fairly well-known example is that of Optum, a system that helps healthcare providers identify patients in greatest need of follow-up. Across more than 100 million patients, the AI-based system was found to be prompting doctors and nurses to pay more attention to one race of people over others. The AI had been trained with data that reflected historical discrimination.
As observed by MIT Technology Review, “AI is only as smart as the data it’s trained on, and that data reflects real-life biases.” Algorithms built with inherent bias can have powerfully negative consequences, especially when the impact is financial in nature.
Guarding against Bias to Continuously Earn Trust
Co-op has access to an extraordinary volume of data. From Shared Branch reports to credit and debit transactions, ATM visits, payments fraud claims and Zelle transfers, Co-op has a clear line of sight into the behaviors, patterns, and trends of credit union members. One of the real benefits of having access to all this data (from an ethics and DE&I perspective) is that this amount of data adds diversity within a dataset that a CU may not have on their own. This diversity helps provide better, more equitable insights and outcomes.
“The responsibility to safeguard and respect that data has not escaped us,” said Maloney’s colleague Callie Mills, also a certified data ethics professional and a Co-op data governance analyst. “Nor has the duty to share the insights from that data with our member-first partners.”
Indeed, through solutions like the Co-op Insights Center and Springboard, Co-op provides credit unions with real-time access to data. In addition, the SmartGrowth team is interpreting data to create campaigns that reach members where they are; clients that use SmartGrowth have achieved a 20-percent lift in revenue, not to mention invaluable member-experience moments.
All tremendously positive outcomes; and yet, Co-op’s data team is mindful of the potential for bias to creep in if they’re not on guard against it.
Out of an abundance of respect for the credit union members Co-op collectively serves alongside its partners, the company is taking intentional steps to consider biases from as many angles as possible before moving forward with any new data-dependent system, technology, or practice. Importantly, Co-op is applying the same scrutiny in retrospect to data technologies that are already part of the fintech and payments ecosystem Co-op operates on behalf of the movement.
“Our purpose is to continuously earn the trust credit unions place in us to be stewards of their member relationships,” emphasized Maloney.
To ensure that purpose is lived out in the day-to-day, Co-op established the Co-op Ethical Data Use and Practices Council, which just celebrated its 18-month birthday. Given its relative newness, the council has experienced many firsts over the past year and a half, continuously impressing stakeholders with its exponential gains.
Along with Co-op’s Data Stewards and the Ethical Data Use & Practices Council, Co-op’s Data Governance has formally defined our Data Culture. Co-op’s Data Culture is a collective, shared belief that the management of data is about people: the people represented in the data collected, the people who manage the data, and the people who are ultimately affected by the use of the data.
“This is a formal stake in the ground that sets the tone for what our first priority is in Data Governance, which is people,” added Maloney.
In addition, all data that flows through Co-op is separated into domains to allow for clear executive ownership. Each domain has a delegated data steward, who is responsible for things like ensuring data integrity and assessing potential impacts.
Co-op has also woven outside perspectives into its practices. As just one examples, Co-op is the first credit union service organization of its size to join the EDM Council alongside thought leaders from companies like Google, Coca-Cola, Bloomberg, and IBM. The cross-industry group reviews, analyzes and provides guidance on the changing role of data, empowering Co-op to do the same for the credit union industry.
A Noble Exercise for the Movement
For most human-centric organizations, credit unions especially, the end game of data analytics is making lives better, in whatever format that takes. Ethical data use in the credit union industry is a means to helping more people achieve financial wellness.
“When you look at the discipline through that lens, every step on the journey to data mastery is approached with a sense of duty and respect.” said Mills. “It becomes a noble exercise, and one we are pleased to practice on behalf of our credit union partners.”
To request more information on the ethical use of data or any of Co-op’s solutions, please contact your Co-op Client Business Executive, call 800.782.9042 or email firstname.lastname@example.org.